10 easy steps to save $10k in a year and actionable tips to achieve each step

You are not alone if you struggle to save $10k in a year. According to Forbes Advisor’s latest survey, more than 1 in 4 Americans (28%) have less than $1,000 saved. Gen Zers have the highest percentage of lack of savings at 32%, followed by Millennials at 31%, Gen X at 27%, and Baby Boomers at 20%.

The same survey also indicates that more than 31% of Americans plan to save between $2,501 and $5,000 for their saving goals in 2024.

While having a small portion of your wages is a great step to financial resilience, saving $2k-$5k/year is not enough to ensure long-term financial stability. What if you want to save $10k in a year? How can you achieve this saving goal and beat 31% of Americans?

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How to save $10k in a year?

If you want to boost your savings, I have an easy guide to save $10k in 12 months. By the way, it is easy to save ten thousand dollars when you realize that saving $10k a year means saving $834 a month, $417 in two weeks, or $208.5 weekly.

Instead of asking, ” How to save $10k in a year, let’s change the question. How can you save $208.5 every week? Or how can you save $834 every month? This strategy makes saving $10k in a year very easy and in this article, I will show exactly how to achieve this saving goal in 10 simple steps.

Without further ado, here are 10 steps to save $10k in a year and actionable tips to achieve each step.

1. Identify your saving goals

Saving $10k in a year can be difficult, but having a savings goals makes it easy to save the money. Yes, you can easily put the money into a savings account and watch the money grow. Without a savings account, however, you might easily lose track of your savings or spend the money on an impulse purchase.

That is why one of the most important steps to saving $10k in a year, is to have saving goals. Here is a list of my favorite saving goals.

Saving for a vacation

Save for a down payment for a home purchase

Put money aside for emergency fund
Save money for vacation

Put money aside for college

Start saving money for a career change

Save money for a business

Boost your savings for retirement planning goals

Actionable tips for identifying your goals to saving $10K in 12 months

Start by identifying why you want to save $10k in a year. These goals could range from paying off debt, buying a new car, or creating an emergency fund. This will help fuel your motivation. Write down your goals on a piece of paper and put it where you can see it daily. The written goals remind you of your savings goals and keep you focused on your journey to saving money.

2. Analyze your current financial situation

While saving $10k a year sounds like a great goal, it is essential to understand where you stand financially before you start putting money aside. Your saving decisions should align with your current financial situation. The main question is should I put money into a savings account or do I have other financial obligations to use the money for?

For example, saving $10k in a savings account when you have $20k in credit card balance will not be a good financial decision.

For this reason, you need to know how much you make, where the money is spent including all your debts and possible saving options. It also makes it easy to save $10k in one year when you understand your numbers because every dollar you make is used to optimize your saving goals. Using a detailed personal budget will help you achieve this goal.

Actionable tips evaluate your financial situation and make a budget

Evaluate how much you earn and spend, and what the money is spent on. Use budgeting tools such as online budgeting calculators or apps to track your income and expenses to understand where your money is going. You can also write down your budget on a piece of paper if that is what you can afford. Once you have a budget, evaluate all your expenses to see if you are overspending on some items. If you do, make a plan to lower those expenses. If you have too much debt, prioritize paying off your debts first.

3. Create a savings plan

A savings plan is essential when saving $10K in a year. What is a savings plan and how does it help you save money? A savings plan is like a roadmap you follow daily until you have reached your savings goals. Think of a savings plan the same as a building blueprint that shows where every screw goes, how much concrete is needed, the sizes of beams, and the overall design of the house.

Just like you need a plan to build a house, you need a savings plan to save $10k in a year.

A savings plan shows how you will save $10K in 12 months. For example, a good savings strategy is to break down $10k into smaller portions that are affordable and easy to save for every paycheck. Break down the $10K into monthly, weekly, or bi-weekly saving goals. By dividing the overall saving target by 12, you will see how much you need to save every month. Dividing your monthly saving target by 4 will result in a weekly savings target.

How to make a savings plan to save $10K in a year?

The best way to save $10k in a year is to break it down into smaller saving goals. Since there are 12 months in a year and you want to save $10k by the end of the year, your monthly saving target is $834. To save $834 monthly, you need to save $208.5 weekly.

The following are your weekly, bi-weekly, and monthly savings targets to save $10,000 in one year.

Saving goal at the end of the year: $10,000

Monthly saving target: $834

Bi-weekly saving target: $417

Weekly saving target: $208.5

Actionable tips to establish a $10k savings plan

Based on your income, expenses, and goals, develop a strategic savings plan that works best for your current financial situation. This may mean aiming to put away a certain percentage of your income every month or cutting back on specific expenses to meet your savings target. Decide if you want to have a monthly target or a weekly saving target. For example, if you get paid bi-weekly, it will be a good idea to save $417 every two weeks. On the other hand, if you get paid monthly, put aside at least $834 every month. You can also use a big chunk of your bonus toward saving $10k in 12 months.

4. Cut down on non-essential expenditures

Ideally, saving money should be straightforward. But, I wish it was that easy. Millions would not be living paycheck to paycheck or below the poverty line. The truth of the matter is you must be strict about your spending habits and cut back on non-essential expenditures to save $10k in a year. Be serious about your finances and only spend on items that align with your saving goals.

Use the budget you created earlier to monitor your expenses and identify areas where you may be overspending. This could be subscriptions you no longer use, eating out daily, or simply overpaying on expenses such as car insurance. To do this, you need to revisit your budget and make changes when necessary. If an expense is not supposed to be there, cut it off.

10 actional tips to lower your expenses and save $10K in a year

Cut down on eating out: Eating out is a leading cause of zero savings for millions of people. To save $10k in a year, opt for cooking at home and packing lunches for work.

Cancel unused subscriptions: Evaluate all your subscriptions, whether they’re for cable, magazines, streaming services, etc. If you don’t use them often, cancel these subscriptions and save those funds.

Use public transportation: If possible, take public transportation or bike to work to save money on gas, insurance, and vehicle maintenance costs. If this isn’t feasible, consider carpooling to share these expenses.

Buy in bulk: If there are items you use very often, buy them in bulk. This approach provides a lower cost per unit, saving money over time.

DIY: From home repairs to personal care, there are many tasks you can learn to do yourself, therefore, saving on the cost of hiring professionals. For example, you don’t need to pay for a car wash every week. DIY if you have a hose, soap, and water. Ask yourself this question: What can I do by myself to save money? For example, I cut my hair to save $100 every month.

Cut down on entertainment: Identify cheaper or free forms of entertainment. Instead of going to the movies every week, you could rent a movie or attend local free events. Also, you don’t need every streaming service that exists.

Limit shopping spree: Shopping can be a major money drain, especially impulse purchases. To resist the temptation of buying unnecessary items, make a list before shopping and stick to it.

Downsize: This could be anything from moving to a smaller home or apartment to getting rid of a vehicle you rarely use. Downsizing can free up money from lower payments or boost your savings by selling items you no longer need.

Save on Utilities: Small changes like turning off lights when not in use, fixing leaky faucets, or using energy-efficient appliances can increase your savings on utility bills over time.

5. Generate additional income streams

Sometimes saving money requires you to increase your income. For example, if you barely make enough to cover all your essential needs, the only way to save $10k in a year will be to increase your income. Making extra cash gives you flexibility in saving money. The more money you can make, the easier you can save $10,000 in 12 months.

There are many ways to make extra cash and boost your income. The best strategies to increase your income include picking up a side gig, freelance side hustles, negotiating a higher salary at your current job, or earning a passive income from investments such as dividend stocks or interest on fixed-income assets. You can also declutter your home and make money selling unwanted items such as clothes, used electronics, unused gift cards, shoes, etc.

You might also like: 14 Best Websites to Sell Products Online

Actionable tips to increase your income and save $10k in a year

Write down a list of things you can do to increase your income. Start by negotiating a higher salary at your work as this is easier and requires no extra work or time. Then, find a side gig you can do to make extra cash. If you have a personalized skill, apply for freelance side hustles or sell items online. It is always easier to monetize your skills than to learn a new one. You can also start selling crafts online or pick up a part-time job at a local restaurant. Give yourself 1 to 2 weeks to complete this task.

Tips to make money fast:

6. Automate your savings

To avoid the temptation of spending, automate your savings. This can be through setting up an automatic transfer to your savings account every time you receive your paycheck.

Actionable tips to automate your savings

Log into your company’s payroll office and ensure the specific amount you want to save gets sent to your savings account. For example, instead of having every penny deposited into your checking account, have your savings portion directly deposited in your savings account. If your savings target is to save $417 bi-weekly, have this portion of your paycheck directly into your savings account.

7. Use smart ways to save money

While you can put money into a traditional savings account, it is not the best way to save money. To save $10k in the year, use smart saving strategies where you earn interest on your savings and grow your net worth. If you don’t earn interest on your savings, your money will not be worth $10k at the end of the year due to inflation. You must earn interest on your savings.

One of my favorite smart ways to save money is to put money into a high-yield savings account(HYSA). These accounts usually offer a higher interest yield compared to traditional savings accounts. With a HYSA account, you can earn as much as 5% or more. You can also put money into a certificate of deposit(CD). CDs are like savings accounts except that the money gets locked in the account until your CD matures. But, you earn a higher interest known as annual percentage yield(APY). Similarly to high-yield savings accounts, you can earn as much as 5% or more with a CD depending on market rates and your institution.

Actionable tips to earn the highest interest on your savings

To earn interest while saving $10k in a year, talk to your current bank and ask them how much interest they pay for a high-yield savings account and CDs. If your bank or credit union pays less than 4.5% APY on CDs and HYSA, try online banks and credit unions. Online banks and credit unions pay higher APYs than traditional banks. Extra tip. Don’t sign up for regular rates. Instead, sign up for promotional/special CDs and high-yield savings accounts.

8. Pay off high-interest debts first

One of the smartest ways to save money is to pay down high-interest debts such as revolving debt. You heard me right. If you have personal loans and credit card debts, paying off these debts will be the best financial decision you can make.

This is because these loans come with higher interest rates which eat up your money if you don’t pay them off fast. For example, a $10k credit card debt can easily become $50k in a few years if you only pay the minimum payment. How does paying off your debts help you save $10k in 12 months?

The answer is simple. Paying off debt fast makes your debt cheaper due to lowering interest charges on the loan. When you allocate extra cash toward your loan, you automatically save money due to lowering interest charges. Instead of putting money in a checking account, use that money to pay down high-interest debts. The fewer debts you carry, the more difference it makes in your finances.

Actionable tips to pay off your debts

Write down all your debts and credit balances such as mortgages, student loans, car loans, personal loans, and credit card debts. Then make a debt management plan to pay off these debts fast. There are many ways to pay off debts but my favorite is the debt avalanche method where you pay off your debts starting from the highest interest debt. You can also try the debt snowball method which helps you pay off debts starting from the smallest debt balance.

9. Hold yourself accountable

Regularly review and adjust your savings plan. Hold yourself accountable to your goals, and celebrate your achievements, no matter how small they may be. To evaluate your progress, check how much you have saved every month and make adjustments when necessary.

Actionable tips to hold yourself accountable when saving $10k in a year

Have a vision board that shows a few columns including how much you want to save, how much you have saved, and the remaining balance. Every time you save a certain amount, update the numbers on your vision board. This way, you will track your progress and save more or less based on how you are doing.

10. Stay dedicated and consistent

Saving $10k in a year is easier said than done. Most people start saving only to give up a few months later. It is not easy to give up things you enjoy doing or stay home when everyone is having fun in the name of saving money. Spending temptations will come and you will want to give up just like everyone else.

That does not mean you cannot save $10,000 in 12 months. All you have to do is stay dedicated and be consistent in your saving strategies. If you said you are going to save $$834 every month, make sure the money is saved no matter the circumstances. If there is a month you fell short, make up your savings for the following month.

What is the 50-30-20 budget rule?

Managing your money can sometimes be difficult especially when you don’t have the basics financial education or a plan to help you save money. If you are confused about how to save money, try using the 50-30-20 budget rule. This budget rule states that you must allocate 50% of your money toward needs, 30% toward wants, and 20% toward savings.

Why is it difficult to save money?

When I was broke, I used to think my lack of savings was due to someone else’s fault. However, I later learned that being broke was due to bad money habits and the financial decisions I made in the past. Like millions of people out there, if you are having trouble saving money let alone saving $10k in a year, it is due to one of the following reasons.

Excessive spending

Excessive spending is a major reason most people cannot save money. We live in a society that encourages consumption and only people disciplined enough can save money. Most people view their paychecks as a reward for their hard work and are often tempted to spend it immediately. Delayed gratification has become a thing of the past.

People are ready to buy the newest gadgets, the best clothes, and the most luxurious vacations to feel happy and successful. For example, if your neighbor has purchased a new car, your response will probably be getting a car loan to buy the same car or better. Credit cards also give us direct access to credit, limiting our ability to save money as higher credit card balances also come with higher APRs.

You might also like: 16 tips to stop buying things you don’t need

Lack of financial education and bad money habits

Another reason people cannot save money is a lack of financial education and bad money habits. Most people sign up for many financial products without understanding how these products will affect their finances. For example, most people are happy to use a credit card to finance a $10,000 home repair. The downside of this financial decision is that this credit card balance comes with a 25% APR that is compounded daily. Most people don’t realize it until after the bill starts coming in.

Bad money habits also contribute to the reasons people don’t save money. For example, people gamble their savings, smoke them, or drink them in expensive alcohol and drugs. Did you know that a pack of cigarettes costs $5 to $10 and some people smoke 2 to 3 packs of cigarettes in a day? That is $3,650 to $10,950 on cigarettes alone in one year.

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High cost of living

I cannot talk about the lack of savings without mentioning the high cost of living. Due to inflation, prices of goods and services have skyrocketed. The only way to keep up with the high cost of living is to make more money. Unfortunately, incomes have not increased at the same rates. So, people are only surviving or being kicked out of apartments and defaulting on their loans due to not making enough money.

Best saving challenges to save $10k in a year

If you are having difficulties saving $10,000 in a year, try a savings challenge. There are a lot of savings challenges you can start to reach $10,000 in 12 months.

Whether you want to use the 52-week saving challenge, practical monthly saving challenges, or weekly saving challenges, you can save $10,000 in a year. I have covered a list of 21 best money-saving challenges in the past. Feel free to read through the list and pick a challenge that works best for you.